In your letter dated June 28, 2005, on behalf of the National Stock Exchange (“NSX” or “Exchange”), formerly The Cincinnati Stock Exchange (“CSE”), you requested that the Commission extend the exemption from Rules 11Ac1-1, 11Ac1-2, and 11Ac1-4 under the Securities Exchange Act of 1934 initially granted by the Commission in 2002.1 In the Initial Exemption Letter, the Commission granted a conditional temporary exemption to the CSE, CSE members, and vendors that disseminate CSE quote information to permit them to display and disseminate their quotes for Nasdaq National Market (“NNM”) and SmallCap securities in rounded, penny increments without a rounding identifier. In a subsequent extension of this exemption, the Commission expanded the exemption to include all listed securities traded on the CSE in addition to NNM and SmallCap securities.2 The Commission granted extensions of the exemption on November 27, 2002,3 May 29, 2003,4 December 1, 2003,5 and June 30, 2004.6 You have requested a further temporary extension of this exemption.

Based on the representations in your requests for relief and contingent upon NSX’s compliance with the conditions stated in the Initial Exemption Letter and the Amended Exemption Letter, the Commission finds that the requested exemption is consistent with the public interest, the protection of investors, and the removal of impediments to, and perfection of the mechanism of, a national market system. The Commission hereby grants an extension of the exemption until August 29, 2005, the effective date for Rule 612 of Regulation NMS.7 This exemption is expressly contingent upon NSX’s continuing compliance with the conditions detailed in the Initial Exemption Letter and Amended Exemption Letter. In light of the implementation of Rule 612, the Commission does not intend to grant additional extensions of this exemption.

For the Commission, by the Division of Market
Regulation, pursuant to delegated authority,

7 In the June 2004 Letter, the Commission stated that the Commission may modify, withdraw, or extend the exemption, depending upon the action taken by the Commission on proposed Regulation NMS. On April 6, 2005, the Commission voted to adopt Regulation NMS. Rule 612 of Regulation NMS as adopted would, among other things, prohibit market participants from displaying, ranking, or accepting quotations in NMS stocks that are priced in an increment of less than $0.01 per share, unless the price of the quotation is less than $1.00. If the price of the quotation is less than $1.00, the minimum increment is $0.0001. See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR ____ (not yet published).